Company Files For Insolvency; Future Unclear

Aero-News has received word two members of the board at Thielert
Aircraft Engines AG were dismissed over discrepancies with the
company's annual financial statements for the years 2003 through
2005. One of those people is company founder and former CEO Frank
Thielert (shown below); the other, former Chief Financial Officer
Roswitha Grosser.

The company also filed for insolvency, due to what it termed
"immediate illiquidity."

Though demand for its powerplants
has increased steadily in the past two years -- with aircraft
makers such as Diamond and Cessna offering factory-spec new
aircraft equipped with Thielert diesels -- the company has a
decidedly rocky financial history. Thielert has delayed releasing
its 2007 earnings report until the end of April, citing the need to
reexamine results from previous years. That decision came after a
German court tossed out Thielert earnings statements from 2003
through 2005, due to valuation discrepancies.

As ANN reported earlier this
month, shares in Thielert fell to their lowest levels
in three years after news of trouble at the diesel-engine maker
first surfaced. At that time, the company's board requested the
immediate removal of Thielert and Grosser from their
executive-level positions, but added Thielert would continue
serving as Chief Operating Officer once a successor was
appointed.

However, things appear to have continued to decline in the weeks
following that announcement. According to documents obtained by
ANN, on Wednesday Thielert's supervisory board dismissed Thielert
and Grosser outright, and terminated their contracts with the
company.

The board cited information since received from the Hamburg
Office of Criminal Investigation, in connection with preliminary
investigations against management board members of the company, as
cause for their dismissals. Based on those findings, the suspect
financial statements from 2003-2005 are to be considered "probably
incorrect and possibly void," according to company documents.

"The suit against Thielert is still active," said a spokesman
with the Hamburg Attorney General's office. "The charges are
fraud."

Revelations of errors to those reports -- willful or not -- have
ominous implications for the company's restructuring efforts, and
perhaps its future. According to company records, investors have
since shied away from supporting the restructuring plan... and
without their support, that plan is on hold.

What that means for planemakers offering Thielert diesels on
their aircraft... customers already flying behind Thielert's
engines... and respected American parts supplier Superior Air
Parts, which was bought out by Thielert in March 2006... remains to
be seen.